WHY CREATE MORE THAN ONE TRUST?

Multiple Trusts and Multiple Trust Plans

A single trust may be adequate if you want to keep personal assets private and protected from business activities or from many types of attack.

Separate assets could have separate protection. That would allow for easier management. It's like owning separate vehicles. When you operate one vehicle, you are only concerned with that single vehicle. You would probably keep a separate folder for each vehicle with it's own documents, service history, liens, benefits, and problems. That also is how you would improve, service, repair, buy, sell, or review the vehicle. A problem with one vehicle would not affect other vehicles, or what happened to the other vehicles. The same principle is true as to having separate trusts.

If you want further protection from attack against multiple assets, you can simply create separate trusts. For example, a lawsuit and potential liability on a real estate property could result in losing a court case and all assets in the trust combined with the real estate would be sharing the risk. If you had separation of assets into separate trusts, there would be no risk to the other assets.

You could also have a different manager on different assets. You could have a different beneficiary plan on different assets. Any problem or attack could be limited to the one trust (the owner of the taxable income) without risk to the other trusts (with passive assets). There would be separate privacy too.

There are really no limits. If you have many assets, owning each in its' own trust is almost like adding insurance riders to each car you purchase. Bookkeeping is easy too. Simply keep all documents of each asset in its' own folder including the trust ownership document, just like keeping the title to your car in your permanent records.

There is no need to have a bank account for each trust. Just keep separate accounting without mixing assets or records.

There is no need to do your taxes differently either. The tax authorities are happy to get their money as if the trust(s) do not exist. Just remember that if you have income, regardless of documents, there are taxes to consider.